Comparing Payments: New vs. Old Cars

In a down economy, people are keeping their eyes open for ways to make their money last a little longer. Although spending for spendings sake is never a wise financial move, keeping a tighter lid on finances is a priority during recession. The good news is there is always room to get creative when it comes to saving money.

Its important to keep in mind that everyone’s budget is limited by their income, and no matter what kind of budgetary tricks you pull, you can’t make money appear that isn’t there. But proper budgeting can help turn money around and start to make it work for you instead of the other way round.

Two of the largest expenses in most budgets are the car and mortgage. Because reducing mortgage expenses is a science all on its own, here we will compare the real cost of ownership between new and used cars.

Why new cars

You need a reliable car to get to work and buying a new car is the best way to ensure your car is in good condition. Also, new cars frequently have better financing options which help make the payments more bearable. A new car will likely be better than a used car in terms of reliability and performance if you can afford it.

That’s not the case for a lot of families, unfortunately. Many opt to have smaller payments at a higher total interest cost to keep their monthly expenses down. This works great if your difficult financial situation is temporary. Nevertheless, over the long run, you’ll pay more money in interest. Good budgeting combines resolving today’s money problems in such a way that you don’t have them all over again.

Why used cars

Most automobiles are designed to last for 10 years or around 100,000 miles. However, when cars are getting close to their expiry age, their prices drop dramatically. There isn’t much appreciable difference between an eight year old car and a seven year old one. Single owner cars are often still in good condition, and their relative cost often works out cheaper than the payments you’d have to make on a newer car.

This is even more dramatic if you are looking for a stylish car. A 2006 Mustang can be obtained for less than £5,000, for example. Older cars sometimes bear a stigma because of unknown reliability and less-than-fresh looks, but proper maintenance and complete, regular check ups can keep your older car as reliable as a newer car. It doesn’t have to be expensive as you can now order car parts online for affordable prices. Brakes online are for example much more affordable than buying them at the store. Stick to classic cars, which have small changes by model year. Plus, most people wont even know the car is older if its properly cared for.

An eight-year-old car with around 80,000 miles has about two years of use in it before major repairs become necessary. If you buy one for the average price of around £3,000, you could use it for two years and still be able to sell it for over £2,000. That means you’d effectively be paying around £42 in car payments a month. Now, compare that to the cost of a new car and consider which one is more affordable.

If you need to change tyres to your new or used car, make sure to visit one of the best retailers in the UK –